Employment lawyers have expressed concern at ambiguities in the Equality Act, which came in to force this month, that could have far-reaching implications for the use of compromise agreements between employers and employees.
Section 147 of the Act sets out the requirements needed to have a qualifying compromise contract to settle claims arising under the Act. One of these is that the complainant must receive advice from an "independent adviser" about its terms and effect. However, this means that a solicitor who was instructed by the employee prior to the production of the final agreement for consideration will be precluded from acting any further.
The Law Society released a statement yesterday indicating that, "a solicitor who was instructed by the employee prior to the production of the final contract for consideration; or who has acted in any way for the employee during the course of his complaint - even in a supporting role to the lead adviser perhaps as holiday cover - will be precluded from acting any further as an independent legal adviser in that compromise contract."
Legal blogger Laurie Anstis, an associate at Boyes Turner, said: "Since any lawyer consulted by the employee might be said to be acting for them, this leads to the absurd conclusion that there is no lawyer who can validly count as an independent adviser. Immediately they start to advise the employee, they will be 'acting for' the employee and no longer independent."
According to the guidance issued by The Law Society, "The effect of this is that there is no way in which compromise agreements under the Equality Act can be made enforceable."
Anstis added that the potential impact of this ambiguity has not yet hit, saying: "Practically speaking, this is not yet as big a deal as it might be, as most compromise agreements currently being dealt with would have blown up before the Act. However, soon we will be dealing with cases entirely under the new Act, and that is when things will get difficult."
Anstis suggested that there could now follow a period of uncertainty while the matter is clarified, and this could continue even if the Act is redrafted. He said: "This is an Act, and it might require another Act to put it right. It could be months before it is resolved."